Where does the money go when a presidential candidate loses?

Wednesday

Jan 30, 2008 at 12:01 AMJan 30, 2008 at 5:12 PM

WANT TO LOCALIZE? Use the online campaign database at http://gov.e-rockford.com/elections/contributions/gns/# to find local folks who gave to one of the recent dropouts – ask why they gave, whether they really believed their guy would win, and what they expect to happen to their money now.

BREAKOUT AT END OF STORY

Lauren FitzPatrick

WANT TO LOCALIZE? Use the online campaign database at http://gov.e-rockford.com/elections/contributions/gns/# to find local folks who gave to one of the recent dropouts – ask why they gave, whether they really believed their guy would win, and what they expect to happen to their money now.
In his quest to become our 44th president, John Kerry banked some $330 million from tens of thousands of donors.
Then the Massachusetts senator lost before he could spend all his millions on himself and Democratic colleagues.
So he began moving those dollars to his congressional re-election fund -- $1 million in early December 2004, then $3 million a few weeks later, according to federal filings.
That chunk of change – a whopping $19 million in all – was a heck of a boost for Kerry’s bid to keep his Senate seat. And it’s totally legal. Doling out some of the surplus in 2006 helped bolster Democrats running for Congress. All legal.
“Once you give the money, you’ve given it to the person to do with it what they choose,” said Michael Goldman, a media and politics professor at Tufts University. “You are trusting that individual.”
The wide field of presidential hopefuls has narrowed on the eve of the mass primary election day known as Super Duper Tuesday on Feb. 5, with just two major candidates left in either party.
So what will Chris Dodd, Bill Richardson, Dennis Kucinich, Joe Biden and Fred Thompson do with the rest of the $35 million they’ve collectively raised (as of Sept. 30, 2007, the most recent day required by the Federal Election Commission)? How about John Edwards and Rudy Giuliani, the latest drop-outs, who together took in nearly $74 million? Will Giuliani throw any of his money along with his endorsement to John McCain?
Richardson and the others certainly spent strong to remain competitive. But for whatever remains in their war chests, they have a few options, according to the Center for Responsive Politics, a Washington watchdog on money in elections.
Any money tagged for the general election cycle (and campaign finance law dictates separate funds and donation limits for the primary and the general elections) must be returned to donors within 60 days after the candidate is no longer a candidate.
For example, Biden also could ask a donor’s permission to re-designate it to his 2008 Senate campaign for re-election or use it to settle campaign debts, according to the center.
But returning the money to individual donors rarely happens because figuring out who gets what is simply too complicated, said Massie Ritsch, a center spokesman.
“In addition to being logistically complicated, refunding to donors presents other difficulties: ‘Who gets their money back?’ Because you’ve spent some of it,” Ritsch said. “It’s all one pot of money.”
And the campaign pots have brimmed over. Candidates have been rushing to grab money from as many donors as possible, since the White House is totally up in the air with no presidential or vice presidential incumbents on the ticket for the first time since 1952. The field of applicants was especially crowded this time around, with 10 Republicans and eight Democrats as of November 2007, a whole year before the general election.
Rules for leftover primary money are more lax, without need for donor permission to give to:
- A charity as long as the candidate doesn’t draw a salary.
- Party committees without limits.
- The candidate’s committee for the Senate or House.
- Another federal candidate’s campaign committee, up to $2,000.
- State and local candidates or to their own state committees, state and local laws permitting.
Candidates also can do nothing at all, leaving the account open indefinitely, according to campaign finance rules.
President Bush still has an open campaign compliance committee – a separate fund to pay for attorneys and accountants, payroll, etc. -- containing, as of Dec. 31, 2007, exactly $ 114,832.19, according to the FEC.
But the extra-stiff competition among the wide field of potential 2008 nominees who’ve busted fundraising records has meant they’ll likely also break spending barriers, too.
Edwards’ campaign said Wednesday that he wasn’t stepping down for lack of money. Nor did the former senator say what he’d do next.
“Who has money left over who didn’t spend it?” Goldman said. “It will be interesting in the end to see if any of (the dropouts end) up with a surplus or a deficit.”
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Goldman called John Kerry’s leftovers an anomaly, saying the senator’s bank account drew criticism from contributors and Democratic colleagues, who bitterly wondered what he was saving it for.
“Lots of people were shocked to learn how much money he still had in the bank,” Goldman said. “99.9 percent of the time, people spend every single penny they have to get elected.”
Kerry just closed out his 2004 presidential account on Jan. 27, settling about $15,000 in bank fees and taxes with the remaining $200,000 and then moving the rest to his own Senate campaign. In 2007, he gave himself $742,508.04.
Right after his 2004 defeat, Kerry sent more than $1 million to the Democratic National Committee and another $1 million to his Senate campaign fund. The trickle into the Kerry Senate fund -- $325,000 here, $500,000 there -- continued through December 2007, when Kerry transferred close to another $200,000, according to his FEC filings.
In 2005 and 2006, when word got out about how much his presidential campaign hadn’t spent, Kerry began writing checks for Democrats running in the midterm elections.
He also has refunded about $125,000 to individual donors, nearly all of that collected for primary cycle spending.
“One has to work real hard to find a losing candidate with money leftover in their campaign account -- not only money, but $19 million,” Goldman said. “If there’s a lesson to be learned, it’s that it will be a long time before another candidate in a close race doesn’t spend every single dime they can to win.”
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When former Illinois Sen. Carol Moseley Braun ended her bid for president right before the 2004 Iowa caucuses, she refunded contributions to eight donors totaling $10,250.
Music producer Quincy Jones was refunded $5,000 he had donated; James Reynolds, chairman of Loop Capital Markets, was refunded $1,000. And the committee of then-Cook County President John Stroger Jr. also got $2,000 back. The rest went to other committees:
- $1,000 to the Prairie Capital Convention Center.
- $250 to Alabama Young Democrats.
- $250 to the Friends to Elect Sheila Smoot.
- $500 to Friends of Terry Link.
- $250 Harris County Women’s Political Caucus.
Braun continued to spend campaign money through 2006 on telephones, something listed as “office support services,” and more than $15,000 on accounting, some $11,000 of which was paid to herself, according to her FEC records. She also paid herself a $1,000 consulting fee, though she has yet to seek another office – all perfectly legal.
“A candidate is allowed to do that. The trouble is the public tends not to like it,” Goldman said.
With debts still totaling about $260,000, Braun continues to file reports on her presidential account with the FEC.

Lauren FitzPatrick is a national reporter for GateHouse News Service. Contact her at lfitzpatrick@gatehousemedia.com.

What's left

Here’s what the dropouts had left, as of Dec. 31, 2007, the last date required by the Federal Election Commission, three days before the Iowa caucuses. How they’ve spent the remaining money won’t be available until Feb. 20 at the earliest.